COMM 1102 Lecture Notes - Lecture 6: Finished Good, Potential Theory, Fixed Cost
15 Oct 2018
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Document Summary
Companies that make a lot of one thing. Accumulate the costs overall and then divide the costs at the end. Equivalent units: one that is partially complete with someone making an estimate about what. % the job is complete (you would be provided with the %) You apply this % to the number of units - ex 10,000 units not yet finished at 70%, so you have. Total equivalent units = ones that are finished + the partially completed units x % of completion. Typical bases to use to allocate overhead (machine hours, direct labour costs/hours) Accumulate all of their costs - material, labour and overhead. Difference - a single product is produced on a continuous basis, vs job order. = the number of partially completed units and the percentage completion of those units. Equivalent units in total = # of units complete + % completion x units still in process. Conversion costs = direct labour + manufacturing overhead (combining)
